As mentioned in our blog series, “Reducing Turnover”, turnover plays a big role the workforce. By taking all factors to reduce turnover into consideration, companies will in turn decrease their total cost of hiring and ultimately have happier employees.
Turnover is often thought of as an end result of hiring. After all, the hiring process usually begins with an employee and employer parting a company. However, looking at turnover at the top of the overall hiring process is vital. Here’s why: according to the Harvard Business Review, bad hiring decisions account for almost 80% of turnover rates. In other words, if the process isn’t right, turnover rates will be higher than they need to be.
Different types of industries and different types of workers account for varying turnover rates in the workforce. Currently, the national average turnover rate is 15%; however, that number can rise to over 30% depending on the industry. Temporary positions typically have a very high turnover rate compared to the national average in the regular workforce, even rising well over 250% for some temporary positions. Moving a turnover rate by a few percentage points can radically impact the TCOW and the TCOH since it has an amplification (or deamplification) effect from not having to repeat every step of the process as many times.
Reducing turnover should be a major goal of any hiring and onboarding process since it’s the first place to look for major cost savings. If nothing else changes in the process, reducing turnover reduces how many times the process is repeated. And that’s a very real possibility for cost savings.
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